Plantastic cooking sauces range shot

Source: Premier Foods

Premier this year expanded its Plantastic brand with three new cooking sauces

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Premier Foods has posted double-digit annual growth in sales and trading profits as price rises and cost savings mitigated “exceptionally high” input cost inflation.

Group revenue increased by 11.8% in the year to 1 April to just over £1bn.

The was driven by a 9.1% rise in the group’s branded revenue, which was up 15.9% in the fourth quarter, while private label revenues were 28.3% higher.

Premier said first-half revenue growth of 6.6% accelerated to 15.8% in the second half as the benefits of pricing action filtered through.

Grocery revenue increased by 15.3% in the year to £746.8m, with branded revenue up by 13.4% to £635.3m.

Market share grew by 64 basis points across the year, illustrating what it said was the strength and resilience of the group’s portfolio as consumer budgets came under pressure.

Revenue growth of Batchelors and Nissin noodles ranges were particularly strong in the year, making Batchelors its biggest grocery brand by revenues.

Sales in its Sweet Treats business grew by 2.7% in the year, with branded revenue down 2.4% to £208.9m, but private label increasing 30.5% to £50.7m driven by pricing benefits.

Revenue overseas (on a constant currency basis and excluding its acquisition of The Spice Tailor) increased by 10% year on year.

The group’s trading profit also increased by 11.5% to £157.5m, which was above already raised expectations as it maintained margins through a combination of cost efficiencies and pricing.

Statutory profit before tax was up 9.6% to £112.4m, reflecting a rise in corporate costs due to wage and salary inflation and £11.1m of restructuring charges, largely related to the closure of its Knighton manufacturing site.

For the current financial year, Premier said it had “strong plans” for product innovation, further consumer marketing and increased capital investment.

Additionally, it expects to continue to explore M&A opportunities.

“With continued positive momentum and a good start to quarter one, the group is well placed to make further progress this year, with expectations unchanged,” it stated.

CEO Alex Whitehouse said the business had “delivered a year of strong performance in a challenging environment”.

“We know that consumer budgets remain under pressure in the current environment and our broad portfolio of brands continue to provide great options to prepare and eat good value, delicious meals at home.

“We are continuing to see consumers looking for convenient, affordable and tasty meal solutions and Batchelors and Nissin were two of our best branded performers in the year which benefitted from this trend. Batchelors, well known for its tasty Super Noodles, has now become our largest grocery brand, increasing revenues by over 20% this year.”

“We will continue to pursue vigorously our five pillar growth strategy and with our positive momentum, including a good start to Q1, we are well placed to make further progress this year, and our expectations remain unchanged.”

Meanwhile, Premier increased its annual dividend to shareholders by 20%, while it announced a further 50% reduction in the net present value of its pension contributions and a cut in annua cash contributions of £6m.

Premier shares have jumped 3.4% to 134p on the news, which is their highest level for more than a decade and up 15% year on year.

Morning update

On the markets this morning, the FTSE 100 has opened up 0.5% to 7,758.8pts.

Other than Premier Foods, risers include Naked Wines, up 3.1% to 108.8p, Diageo, up 1.2% to 3,541.5p and SSP Group, up 0.9% to 266p.

Fallers include AG Barr, down 1.6% to 509p, Marks & Spencer, down 1.2% to 161.9p and Glanbia, down 1% to €13.94.

Yesterday in the City

The FTSE 100 fell back 0.4% yesterday to 7,723.2pts.

Grocery fallers included McBride, down 3.6% to 30.7p, THG, down a further 3.5% to 59.5p, Bakkavor, down 2.5% to 92p, Britvic, down 2.3% to 914p, Naked Wines, down 2.2% to 105.6p, Tate & Lyle, down 2.2% to 782p and Haleon, down 2% to 339.8p.

Risers included Nichols, up 3.4% to 1,055p, Just Eat, up 1% to 1,474p, Greggs, up 1% to 2,780 after its Tuesday trading update, Kerry Group, up 1% to €95.50 and Virgin Wines, up1% to 32p.